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Panic Grips Chinese Markets As Beijing Ramps Up FX Intervention
I'd apologize for spending so much time on China's multi-faceted, rapidly worsening economic crisis if I were sorry. But I'm not.
Xi's totalitarian turn is partly responsible, and there's no excuse for totalitarianism. Although shrouded in egalitarian Party-speak, Xi's "common prosperity" push was part and parcel of a larger effort to control all aspects of Chinese society and otherwise subjugate anyone and everything to his "Thought." It's unnerving, for lack of a better word.
Although ostens
You’ve been spot on to focus on China with a nod to Japan as well.
As you point out, we can cheer for Xi’s humiliation, but who could or would replace him? As the case with Putin.
Do we expect regimes that will introduce free (as opposed to rigged) elections and a total shift to “free market” capitalism?
Then lift our eyes a little. It’s been three months since the elections in Thailand and still no government has been formed.
Or check out Jav Milei in Argentina as the October elections draw closer. Even our “stauch ally” Modi seems to have steered into some headwinds. Scare quotes due to India’s major role in evading sanctions on Russian oil.
I guess we should be thankful here in the US as long as Trump’s sway keeps fading. Unless the alternative is DeSantis.
China and Thailand can take some shade on elections but in the recent past Belgium (you know, our NATO home) spent over a year trying to get a government together after an election. And Italy … well since WWII, about 75 years ago, they have had 69 new governments. They still can’t get the hang of that election thingy.
China seems to be on everyone’s mind today. Here at the Heisenberg Report, I’ve certainly shared a comment or two about China.
I like to comment about China’s leadership, the tendency they have to presume their inevitable supremacy in the world, and I’m amused by how they brag about their army, their army-navy, and their air force . . . But then there’s the matter of how they manage property in China.
China’s crazy property sector is truly the “forever problem” of the country. Why on earth do they still have all those empty apartment buildings? It’s crazy! What’s up with that? Didn’t Evergrande default last year? How did Evergrande even make it through Covid?
They can manage, as they have thus far, to skirt their property problems. But they’ve really bought a load of %&#t, not only with the properties, but also with their own country, and with the world. Sure, they’re good managers. But people in countries that may need a friend with money are already learning that the Chinese will foist on them untenable volumes of debt and they are not to be trusted.
Xi really looks sharp in that grey communist party garment that buttons up near his chin. But the party needs to be about more than Xi. They need to loosen up and think more broadly about their possibilities in the world, not by being great at the Olympics, but by how they can actually win friends without lying and trying to steal their money. Xi should off-load the starched garments and pretentious conventions of the communist party. The Chinese economy will only worsen if he continues to stick with this one-man emperor thing that he is doing now, whatever the communists call it.
I know China’s possibility for continued, growing, economic success in the world is fairly likely, even though they look down on countries in Africa, Asia, the middle east, and South America, and seek to take advantage of them by stealing their land in whatever way they manage it. But I still say that China handicaps its own country as long as they have communist one-man rule.
What else can I say? How about Vladimir Putin? A similar style to be sure.
And Evergrande filled BK in NY (I assume this is for its US assets, and that there are equivalent filings in China?).